What is a quasi-loan?

A quasi-loan refers to a situation where a company pays a third party on behalf of a director, with the expectation that the director will later reimburse the company for that payment. This arrangement often does not constitute a formal loan with documented terms, but it functions similarly because the company effectively provides funds that the director is obligated to repay.

This term is particularly relevant in discussions of corporate governance and compliance, as it can raise questions about transparency and potential conflicts of interest. It is essential for companies to properly disclose such transactions, as they may not fall under standard lending regulations or practices, but they still have implications for corporate accountability.

Other options like a loan with variable interest or negotiable repayment terms do not capture the essence of a quasi-loan, as they describe the nature of traditional lending rather than the specific arrangement between a company and its director. A loan not documented in writing also does not accurately reflect the nature of a quasi-loan, which is centered around the relationship and responsibility between the parties involved rather than the documentation aspect.